Hundreds of onshore Chinese bonds will be added to the Bloomberg Barclays Global Aggregate Index over the next 20 months. Analysts estimated that the full inclusion will attract around $150 billion of foreign inflows into China’s roughly $13 trillion bond market, the third-largest in the world after the U.S and Japan.
Domestic Chinese bonds became part of a major global index on Monday, marking another milestone in the opening up of China’s financial markets.
This inclusion is the latest step in opening china’s Financial market to the global investors. China has also launched “connect” program that allow investors to buy certain shares and bonds through Hong Kong’s stock market.
“Today marks an important milestone as China’s capital markets continue to find their place in the global investment mainstream,” said Justin Chan, HSBC’s co-head of global markets in Asia Pacific.
The inclusion of Chinese bonds into various indexes will push China to further reform its financial markets, said Neeraj Seth, managing director and head of Asian fixed income at global investment management firm Black Rock on Monday.
“More opening up of the financial sector, reforms with regards to how you manage credit risk, more development of the derivatives market onshore — all that will continue, which will further pave the path for both index inclusion as well as entry of foreign investors into this market,” he told CNBC’s .
